The Central Bank outlined employee retention strategies amid a labor shortage.

Amid a labor shortage, wage indexation doesn't always help attract and retain workers, so Russian employers are actively implementing additional incentives. This was stated in the December report "Regional Economy: Comments by the Central Bank of Russia," which was reviewed by RBC. These measures include, in particular, mortgage interest payments, the opportunity to purchase housing at a discounted price, expanded social benefits and gym memberships, compensation for children's recreation, and event ticket purchases.

Furthermore, many companies reported increased labor intensity. To fulfill growing orders, some companies were forced to switch to a six-day workweek and hire students part-time. "Working on weekends and additional shifts, including night shifts, was paid at higher rates," the report states.

Russia is short 1.5 million skilled workers, primarily in the construction and transportation sectors, as well as in housing and utilities, Deputy Prime Minister Alexander Novak stated earlier. The labor shortage is the main problem facing the Russian economy, and the historic low unemployment rate (2.3% as of October) indicates that "there are practically no free hands left in the economy," said Central Bank Governor Elvira.Nabiullina .

Housing motivation

Various options for compensating mortgage payments, as well as providing housing for employees and their families when relocating from other regions, have become popular financial support tools for employees at large enterprises, the report's authors note, citing a survey of more than 13,000 non-financial enterprises across Russia conducted by the Bank of Russia in November.

For example, some companies in the Ivanovo region are implementing a housing construction project for employees. A company in Voronezh has a program that provides housing to employees with the opportunity to purchase it at a discounted price, provided they remain with the group for ten years. A large company in the Vologda region has also introduced a system to compensate employees for mortgage interest payments.

Corporate policies have impacted the real estate market. For example, in the capital region, such measures have led to increased demand for multi-room apartments in areas with developed infrastructure. "This is partly due to the fact that many Moscow companies are covering rent for employees and their families as part of relocation programs," the Central Bank's report notes. However, the period of sharp increase in demand for rental apartments has already ended: in October, rental prices in most regions of Central Russia remained unchanged compared to September, and a cooling in the market was recorded in November, the Central Bank notes.

Bring a Friend Promotion and Training

According to the Bank of Russia, various types of "referral programs" for attracting human resources have become widespread. These programs involve cash payments to current employees for recruiting a new or existing employee.

Another common incentive measure is employer-sponsored training. This method is used, in particular, at shipbuilding and ship repair facilities in the Northwestern Federal District, according to a Central Bank report. To address the labor shortage, employers have begun offering internships more frequently when posting job openings. According to the Central Bank of Russia, in St. Petersburg, internships are most often offered in the following fields:IT , retail and industry.

To develop their talent pool, companies continued to establish their own training centers and collaborate with educational institutions, according to the Central Bank's report. For example, a mining company in the Murmansk region is implementing a project at the regional university to establish a higher school of mining engineers for the entire Northwest. And in Karelia, a large pulp and paper mill launched a free training program in key areas of the company's operations this fall, including on-site training, with stipends.

Increased salaries and material incentives

In a competitive labor market, employers continue to use wage increases as an incentive, according to a Bank of Russia report. For example, a major metallurgical company in the Volgograd region increased wages by 10% in October. A major wood processing plant in Primorye doubled the wages of timber truck drivers in October.

Across Russia as a whole, nominal accrued wages increased by 18% from January to September, according to the report. Moreover, in March, the annual increase reached its highest level in nine years, reaching 21.6%. "A survey of enterprises conducted by the Bank of Russia in November 2024 showed that almost all respondents (93%) indexed employee wages this year. Moreover, 43% of companies that increased wages increased them by 10 to 20%, approximately 38% by 10%, and 19% by more than 20%," the report states. Real wages (that is, those adjusted for inflation) increased by 9% in the first nine months of 2024, according to Rosstat .

According to the Central Bank, this trend will continue: 75% of surveyed companies plan to increase wages in 2025. "Some companies note that they will focus on the upcoming minimum wage indexation (a 16.6% increase from January 1, 2025)," the report notes.

In addition to salary increases, companies are introducing other financial support measures. For example, one enterprise in the Jewish Autonomous Region has begun providing interest-free loans to employees. And the Far Eastern branch of a federal railway carrier announced that, starting in November, it introduced rescheduling payments to those who previously worked for the company and are willing to return, according to the Central Bank.

Social benefits and a six-day week

Other employee incentives include providing company transportation, free meals, mobile phone coverage, and improved working conditions. The Central Bank's report notes that companies are actively expanding their benefits package by increasing voluntary health insurance coverage and subsidizing sports memberships. "Companies' social support measures for families with children are becoming increasingly important, including reimbursement of childcare costs for employees' children, as well as payments for the new school year, child recreation, and tickets to children's events," the Central Bank's report states.

But some are forced to increase the workload of existing employees due to staff shortages. Specifically, a clothing factory in Primorye, which, amid a shortage of seamstresses, switched to a six-day workweek to fulfill the growing volume of orders, according to Central Bank data. Meanwhile, retailers in Sakhalin have begun hiring full-time students part-time. Furthermore, a number of organizations have practiced "combining jobs, positions, professions, and performing additional duties for additional pay."

The scale of the problem and possible solutions

In 2024, 76% of companies reported staffing shortages, according to a study by ECOPSY Consulting. "By comparison, in 2023, the same figure was only 26%. The number of companies facing staffing shortages has tripled in a year, underscoring the rapidly deteriorating situation in the labor market," notes Lyubov Shokina, head of ECOPSY Consulting's Staffing Strategy practice.

According to Elena Varshavskaya, a professor at the Department of Organizational Behavior and Human Resource Management at the Higher School of Business at the Higher School of Economics, the labor shortage in Russia will continue for a long time, and there's no point in hoping for an improvement in the situation due to a change in demographic trends. "The labor shortage situation began to worsen in 2016–2017, then"COVID-19 shifted attention, but after the pandemic, things only got worse. And along with the demographic factor, there was a dramatic shift in demand—different workers became in demand," Varshavskaya notes. In other words, two problems converged: a decline in labor supply and a shift in demand, she adds.

Employee salary increases can't continue forever because companies don't have the resources, and additional incentives only solve the problem in the short term, the expert warns. Shokina agrees: six months after a salary increase, the motivational effect significantly diminishes, and companies once again face the need to retain employees. "Furthermore, salary increases can trigger 'salary wars,' which are economically unprofitable and accessible to competitors, creating the risk of losing employees with the next salary increase," the expert emphasizes.

Varshavskaya believes that increasing productivity and improving work organization could be a solution. "However, increasing productivity requires financial investments, which companies are currently finding difficult to make. And work needs to be done here and now," Varshavskaya says.

The “employee market” is not a temporary trend, but a newShokina is confident that this is a reality . "The situation is unlikely to change in the coming years, so companies must adapt to these conditions and develop long-term strategies for understanding candidates and their needs to develop a value proposition and build an employer brand," she concludes.